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Tuesday, September 23, 2014

PayPal opens the door a bit for bitcoin payments

Some merchants who use PayPal can start accepting bitcoin, thanks to a partnership between the online payments company and several crypto-currency processors.

PayPal announced the partnerships Tuesday, signaling a measured approach to adopting bitcoin, a digital currency that has grown in popularityover the last few years.

By partnering with payment processors BitPay, Coinbase and GoCoin, PayPal won't have to take on the risk of processing the payments. The company is also limiting the purchases to digital goods.

"PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers. Our approach to Bitcoin is no different," Scott Ellison, senior director of corporate strategy, wrote in a blog post. "That's why we're proceeding gradually, supporting Bitcoin in some ways today and holding off on other ways until we see how things develop."

Merchants in North America will have access to the payment option first. PayPal announced last month that businesses working with its subsdiary Braintree will also be able to accept bitcoin through a deal with Coinbase.

While shoppers can use bitcoin like other currencies, it is not subject to the same transaction fees or bank regulations. Since the regulatory landscape around bitcoin is still developing, larger online retailers have been less inclined to adopt it. But there has been some success. E-tailer Overstock.com, which started accepting bitcoin in January, said the site expect to pull in $1 million in bitcoin sales per month by the end of this year.